According to a recent article in the "Wharton Knowledge Online" by Tencent Technology Editor, the data breach scandal that Facebook has recently encountered has caused the company's basic model to be questioned, and they may end up facing the same supervision as public utilities such as railways and electricity. But it can also regain people’s trust by changing business models.
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Facebook has been in a bad situation in recent weeks. Since the data breach scandal erupted in mid-March, the market value of the world's largest social networking company has shrunk by 41 billion U.S. dollars because of investors’ selling. Although Facebook is certainly not the only tech giant that allows marketers to mine their user data, and the two major US political parties must have also used and analyzed the company’s data to target voters, the company’s actions have caused public anger. Especially after the false news storm.
U.S. federal and state law enforcement agencies are investigating Facebook. The Congress also asked CEO Mark Marker (Mark Zuckerberg) to testify. More and more companies stop advertising on Facebook. Tesla CEOs Elon Musk and Cher and Weier & Middot; and Wil Ferrell and other celebrities joined the #DeleteFacebook campaign and closed their accounts. Nearly 175,000 people signed the petition of Change.org and asked Facebook to better protect their data and increase transparency. This is the biggest public relations crisis Facebook has ever faced.
How can Facebook regain public trust? Wharton management professor David Hsu believes that the social network should deploy more resources to protect user data and think deeply about how their platform may be abused by others. But Facebook seems to be more concerned about how to realize its mobile platform, especially after becoming a listed company. “All Wall Street analysts have said that ‘this is our indicator of concern. ’Therefore it is no wonder that the company’s executives are more concerned with this indicator, and do not care much about protecting user data. ”
But in reality, privacy concerns will have an impact on user content as a core product. Without paying enough attention to this macro risk, the company paid a heavy price. “This may reflect management experience issues. ” David · Xu said. Zuckerberg's management style is that he will personally make a lot of decisions about user experience. Although the founding CEO can learn how to manage the company as the company grows, it must recognize its advantages and disadvantages. "This is not a person's performance. ” He said. Founders and leaders need to “clear” their expertise and understand where they should seek sensible advice. ”
The cause of the scandal
The cause of the incident occurred in 2013 when a university researcher collected data from 27,000 Facebook users who participated in the personality test. Facebook then allowed third parties to collect information from users and their friends. Therefore, the researcher was able to obtain millions of Facebook user data without permission.
Facebook stated that the company has cancelled this policy in 2014. A year later, a reporter told Facebook that the researcher shared data with Cambridge Analytica, a precision marketing company in the United Kingdom and was also employed by the Trump campaign team. This unauthorized sharing has violated Facebook's policies.
Facebook stated that they had asked the researcher and Cambridge Analytcia to prove that the unauthorized data had been deleted and that these companies did delete the data. However, some reporters said last month that the data may not have been deleted. Facebook stated that Cambridge Analytica agreed to be reviewed. At the same time, Facebook is also working to strengthen other data control measures: Now, third parties must be authorized to obtain user's friends' information. Developers must also obtain Facebook permission to ask users for sensitive information.
Facebook executives met with reporters last week and promised to protect the integrity of data, especially data related to elections. The company also elaborated on a series of improvements to combat foreign intervention, remove false accounts, increase advertising transparency, and curb the spread of fake news. "No one can turn back the clock, but we will shoulder full responsibility for ensuring that our democracy will not be attacked again." “Gey Rosen, vice president of product management at Facebook, said,” we will perform our duties very seriously and seriously. ”
Solve the problem
Lyle Ungar, a professor of computer and information science at the University of Pennsylvania, said that Facebook’s mistake is that they should not allow third parties to collect information without their permission, such as their friends, and that third parties do not Data should be sold without the user's permission; they should also make political advertising more transparent and let people know who is paying for it; the company should also be more responsible for what third parties can do on their platform. ; And specific to the way people use their data for others, they should also be more sensitive.
Wharton operations, information and decision-making professor Lynn Wu said that Facebook should also learn from Google to help users understand what data is being accessed by the platform. “If you log in Google's profile page, you will see what information and interests they know about you, and you can also make adjustments and changes. ” She said. In addition, Facebook can also send regular statistics about users' social graphs. “This shows how much they know about you. These are your friends. This is how your data is shared. ” She said, "You may also be able to control this. ”
Wharton marketing professor Ron Berman added that "Facebook's problem partly stems from the fact that the company does not simply store user information. They are also collecting and adding additional data to help advertisers target users on Facebook. ” The company should have asked users if they would like their data to be merged with third-party information and share it with advertisers. For example, credit card companies must disclose their data sharing methods, and consumers can also refuse to share.
Although public opinion criticized the content of Facebook may help Trump to become president of the United States, Berman does not think people are so easily affected. "It is very difficult to change people's concept of election." First of all, they must be hesitant voters —— survey shows that there are not many such people. Second, you need to be exposed to only one type of politics. "But indecision itself indicates that voters will seek different political opinions, so this means that they will also see the opposite message. "I don't think that the impact of the election is really as great as people claim. ” He said.
Rapid breakthrough, in addition to the old Lixin?
However, Facebook has more important issues to worry about than to solve the problem by strengthening privacy controls. The company's famous adage is "a rapid breakthrough, in addition to the old Lixin". However, their scale is already very large, with 2.1 billion users. Therefore, apart from the old, it may have a wide impact. Therefore, Wharton legal research and business ethics professor Kevin & middot (Kevin Werbach) believes that Facebook should carry out "a real cultural change".
Woolbach compares the dilemma of Facebook with Microsoft in the 1990s, co-founder and CEO Bill Gates; the government sued the company for violating antitrust laws. Microsoft was accused of monopolizing the software bundled with the Windows operating system. And now, Microsoft has learned a lesson. He said that under the leadership of the CEO Satya Nadella, the company has become a "different company" and is not at the product level but at the cultural level. ”
But Waughbach is still thinking about whether Facebook needs to make a more profound transformation than cultural change. The company "" understands that users and governments around the world are currently raising fundamental issues, not only Facebook's actions in this case, but also the role that Facebook plays. "Walbach said, "Is there an inherent problem with information platforms like Facebook?" This poses a fundamental challenge to the company. ”
“Facebook and similar companies——whether it is initiative or forced by the government—— whether it must fundamentally change the business model? "Walbach asked," not just the extent to which they share information with third-party applications. Will they be forced to share social graphs with their competitors in accordance with the requirements of some European countries? This will be a fundamental change and will have a huge impact on their business. But they themselves face such a fundamental question: Is this business model ethical? Is it worth trusting? ”
Turn Facebook into a public utility?
Wachbach believes that digital platforms may be regulated as a public utility like railroads, electricity, communications, and broadband. "We believe that these are all social infrastructures and have established a set of laws and regulations accordingly. ” He said. The United States has not imposed strict restrictions on digital platforms so that they can innovate and subvert traditions. “But I do not think that we should longer regard Comcast as a strong company and we should not regard Facebook and Google as powerful companies. ”
Lynn · Wu put forward another idea: You can use the blockchain technology to turn Facebook into a decentralized social network. This means that there is no central control organization such as Facebook to make decisions for users. Instead, users can decide for themselves what they want to see on the platform, how they want the platform to operate, and how they want the data to be shared. She also pointed out that this is similar to the open source Linux operating system. Users can decide what to add to the software. Even if Facebook really becomes a decentralized platform, it can still generate profits. Lynn · Wu said that although Linux is free, it can still make money by developing software on it.
However, the disadvantage of decentralization is that users may not be motivated to create new features. Lynn · Wu pointed out that even if Linux is free, Windows is still the dominant system for PC devices, and Mac OS X is the dominant system for Apple Computer. In addition, there are already some decentralized social networks available for privacy users to use —— but it is not popular. “They are still small in scale and are in an entrepreneurial mode. ” She said. In order to fully integrate these two forms, someone came up with a new business model. “But I think Facebook doesn't necessarily have to do this. ” Lynn · Wu said.
Of course, Facebook can also charge users, instead of relying on advertisers to make money. Berman said that before deducting expenses, the company earns about 18 US dollars per user per year, and only 7 US dollars if the operating costs of the platform are removed. "This is not a very high number, but consumers are often reluctant to pay such fees to protect privacy." ” He said. Another option is to limit the company’s ad serving, for example, allowing only the brand that the user chooses to serve ads.
Facebook is by no means the only company that offers free services by realizing user data. However, media criticism triggered by Cambridge Analytica may lead to tightening privacy laws and affect many companies, especially technology giants. "Google also has this problem. Amazon and other large Internet companies have this problem. They will collect and use user data for various reasons." “Wharton marketing professor Pinar Yildirim,” said Pinar Yildirim, “They are all affected by the regulations that have been issued in this incident.” ”
This will also have a "great impact on consumers", Yildimim continued, "and consumers have become accustomed to free use of services. In exchange, they will provide information to advertisers." If we start to prevent third-party developers and advertisers from using data, it will change the way consumers enjoy services. ”
If we look at the EU, we know that the privacy regulations there are more stringent than in the United States. A few years ago, research conducted a study on new EU regulations that required the relevant service to disable user tracking by default, and not to enable it by default. Apps, websites and online services are still free, but advertising becomes more annoying. Since most people do not initiate the initiative, marketers cannot target audiences with smaller, more accurate ads. What is the result? Large pop-up ads occupy the entire screen and become more common. “Because they can't continue to position you effectively, they can only cover the entire screen. This is annoying. ” She said.
When the EU's new General Data Protection Regulation came into effect on May 25, marketers faced a more severe situation. A key change in this legislation is that companies in any part of the world must target users in Europe to obtain the user’s initiative to collect their data. Once the violation occurs, it will face severe punishment: up to 4% or 20 million euros of its annual revenue, whichever is greater. In addition, cloud storage companies are no exception.
Due to strict restrictions, European consumers should not be exposed to too many products and services as users elsewhere. But their data is at least protected. "The welfare of consumers will suffer certain losses." Lynn & middot; Wu said, "At the same time, people may be more concerned about privacy, so we must think about the pros and cons of doing so. ”
Zuckerberg recently told CNN that Facebook welcomes regulation. "We believe that the key issue is what kind of supervision is the right kind of supervision, not whether the industry should be regulated." "For example, he said that television and print advertising face a lot of supervision. "We do not quite understand why the Internet should reduce supervision. In fact, the same transparency should be observed. "He said that Facebook is actively launching some tools to let users know exactly who bought the ads and what they were aiming for.
Wharton marketing professor Gideon Nave said that Facebook has become a sign of personalized advertising, but other companies are doing the same thing. In addition, personalized and accurate ads have been appearing for many years—— this time only increased campaign efficiency. “If you advertise in golf magazines based on the demographics and psychological characteristics of golf enthusiasts, you are actually positioning it precisely. ” He said. The emergence of the Internet and platforms such as Facebook and Google “Let us have the ability to achieve this goal in a better way, because we can locate specific people one by one. Nef added that "this idea is not new in itself." ”
The reason why Facebook has been pushed to public opinion is because it exposes how easy people can be manipulated. "People don't like the feeling of being manipulated. "Neff said," in fact, we have been manipulated since we were born. We were manipulated to like certain soft drinks and computer brands, "despite the fact that these things are almost exactly the same. "Advertisers let you focus on emotions and other factors, because you will connect these factors with specific products. ”
In the long run, Nef thinks that Facebook can survive this crisis. "People will forget the past. Many people still don't care too much about privacy. ” He said that Facebook has adjusted its policy of allowing third parties such as Cambridge Analytica to use its data several years ago, and no one seemed concerned at the time. ”
Millennials seem to be more relaxed about data privacy because they are already accustomed to using personal information in exchange for free services. In fact, 40% of Facebook users choose to publish their own Facebook likes. "People may forget this matter in a few weeks. Nef said, "This is only temporary." ” (Compiling/Long Song)